Proposed city budget doesn’t include pay raises

Thursday

May 22, 2014 at 11:45 AM

With city revenues again failing to reach anticipated levels, members of the Hannibal City Council reviewed a budget for fiscal year 2014-15 that, among other things, does not include raises for most city employees.

DANNY HENLEYdanny.henley@courierpost.com

With city revenues again failing to reach anticipated levels, members of the Hannibal City Council reviewed a budget for fiscal year 2014-15 that, among other things, does not include raises for most city employees.

During a Committee of the Whole Council meeting Wednesday afternoon at city hall, City Manager Jeff LaGarce advised that drafting a budget presented a challenge.

“Several traditionally-large revenues were extremely disappointing again in fiscal year 2014, resulting in a low beginning cash balance for the forthcoming year. Consequently, revenues have been budgeted very conservatively in fiscal year 2015,” he wrote in a memo to the Council.

A budget has been drafted that will result in a projected General Fund difference between revenues and costs of $683,000 to the positive. Of that amount, $243,000 will be used to “add to the city’s depleted reserve.”

According to LaGarce, a 2 percent pay increase would cost the city $160,000.

“No revenue source is growing in parallel fashion,” he said.

The lone city employees due raises are members of the Fire Department covered by its “longevity plan.” Those not included in the plan are the chief, deputy chief and office manager.

In addition to pay raises, LaGarce noted other items were omitted from the proposed budget that he would like to fund.

“All airport runway-related expenses have been cut. While 90/10 grants are a wonderful thing, the city cannot meet the expensive 10 percent matches at this time. If we choose to do so, we would only exacerbate our financial troubles,” he said. “Nor can we afford to restore two firefighter positions, which are understandably desired by the Fire Department.”

Despite drafting a budget that will have the city in the black, LaGarce is proposing a restructuring of city operations that will increase General Fund revenue in the future.

“Suppressing staffing levels and expenditures within the current operating structure is not sufficient,” explained the city manager.

While LaGarce did not provide any specifics regarding his ideas on restructuring, he estimated they could save the city in the neighborhood of $600,000.

“They’re just a different way of doing things,” he said.

LaGarce said that after “five years of recessionary hindsight” the city must conclude the current economy is the “new norm.”

“(We) must take appropriate measures to structurally and fiscally adjust to that norm,” he said.

Unlike the current budget year when five city positions were eliminated, LaGarce says no positions will be added or eliminated in 2014-15.

“The city has reached a minimum threshold where further cuts to staff – in any department – will directly impact service to the public,” said LaGarce.

“We’ve got to give service to the people,” said Mayor Roy Hark.

With city pension contributions having increased from $419,000 in 2008 to $900,000 in the upcoming fiscal year, LaGarce raised the possibility of increasing the current pension levy from 12.8 cents per $100 assessed value to 25.6 cents. Such a change would generate an additional $320,000 per year for the pension fund.

“Since the city funds the pension plan at the precise level required by the actuarial, this new tax would maintain pension funding levels as required, and $320,000 per year would be freed in the General Fund,” said LaGarce.

A public hearing on the budget is planned for Tuesday, June 3. Final adoption is scheduled on Tuesday, June 17.